BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: April 24, 2013 2013-2014 Regular
Session
Consultant: Alma Perez Fiscal:Yes
Urgency: No
Bill No: SB 607
Author: Berryhill
As Introduced/Amended: February 22, 2013
SUBJECT
Employment: working hours
KEY ISSUE
Should an alternative to the existing election procedure for
selecting a workweek schedule be established that would allow an
employee to request to work up to 10 hours per day within a
40-hour workweek without the payment of overtime compensation?
ANALYSIS
Existing law, with certain exceptions, defines a day's work as
eight hours of labor. Any additional hours worked in excess of
eight hours in one day, or a 40-hour workweek, must be
compensated with the payment of overtime.
Under existing law, the payment of overtime compensation is as
follows:
� Any work in excess of eight hours in one workday, any
work in excess of 40 hours in any one workweek, and the
first eight hours worked on the seventh day of work in any
one workweek shall be compensated at the rate of no less
than one and one-half times the regular rate of pay for an
employee;
� Any work in excess of 12 hours in one day shall be
compensated at the rate of no less than twice the regular
rate of pay for an employee;
� Any work in excess of eight hours on any seventh day of
a workweek shall be compensated at the rate of no less than
twice the regular rate of pay of an employee.
Existing law provides that the standard requirements for the
payment of overtime compensation do not apply where (Labor Code
�510):
a) An employee submits a written request to make up work
time that would be lost as a result of a personal
obligation of the employee if the make-up time is performed
in the same workweek in which the time was lost. Such
make-up work time may not be counted towards computing the
total number of hours worked in a day.
b) An alternative workweek schedule has been adopted
pursuant to Labor Code Section 511:
a. Allows an employer to propose an alternative
workweek for no longer than 10 hours per day within a
40-hour workweek and, if approved, the employer is not
required to pay overtime compensation.
b. The employer must specify the workers in a
work unit and conduct a secret ballot election. 2/3
of the workers in the unit must approve for its
adoption.
c. The employer can offer a single work schedule
that would become the standard OR a menu of work
schedule options, from which each employee can choose.
d. Employees who adopt a menu of work schedule
options may, with employer consent, move from one
schedule to another on a weekly basis.
e. The employer is required to make a reasonable
effort to find a work schedule not to exceed eight
hours for a worker unable to work the alternative
schedule.
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Senate Committee on Labor and Industrial Relations
c) Employees have adopted an alternative workweek schedule
pursuant to a collective bargaining agreement if the
agreement expressly provides for wages, hours of work, and
working conditions of the employees, as specified.
d) An alternative workweek schedule is inapplicable because
the work relates to cases of emergency or the protection of
life or property, to the movement of trains, or to certain
hardship exceptions as specified by the Division of Labor
Standards Enforcement.
In addition, existing law provides that the standard
requirements for overtime compensation do not apply to certain
exempt executive, administrative, and professional employees, as
specified. (Labor Code � 515)
This Bill would enact the California Workplace Flexibility Act
of 2013 to permit an individual nonexempt employee to request an
employee-selected flexible work schedule, as specified, and
would allow an employer to implement this schedule without any
obligation to pay overtime compensation.
Specifically, this bill:
� Provides that an individual nonexempt employee may work
up to 10 hours per workday without any obligation on the
part of the employer to pay an overtime rate of
compensation if the employee requests this schedule in
writing and the employer approves the request.
� Specifies that if an employee-selected flexible work
schedule is adopted, the employer shall pay overtime at one
and one-half times the employee's regular rate of pay for
all hours worked over 40 hours in a workweek or over 10
hours in a workday, whichever is the greater number of
hours. All work performed in excess of 12 hours per workday
and in excess of eight hours on a fifth, sixth, or seventh
day in the workweek shall be paid at double the employee's
regular rate of pay.
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Senate Committee on Labor and Industrial Relations
� Provides that an employer may inform its employees that
it is willing to consider an employee request to work an
employee-selected flexible work schedule, but shall not
induce a request by promising an employment benefit or
threatening an employment detriment.
� Specifies that an employee or employer may discontinue
the employee-selected flexible work schedule at any time by
giving written notice to the other party, as specified.
� Provides that this section does not apply to any
employee covered by a valid collective bargaining agreement
or employed by the state, a city, county, city and county,
district, municipality, or other public, quasi-public, or
municipal corporation, or any political subdivision of this
state.
� Specifies that these provisions shall be liberally
construed to accomplish its purposes.
� Includes several findings and declarations stating the
need to reform outdated and inefficient workplace and
overtime rules to allow for more flexibility for employers
and workers to schedule their hours of work for mutual
benefit.
COMMENTS
1. Need for this bill?
Labor Code �510 which covers the hours constituting a day's
work has been in effect since its enactment in 1937. The
general overtime provisions are that a nonexempt employee 18
years of age or older shall not be employed more than eight
hours in any workday or more than 40 hours in any workweek
unless he or she receives the appropriate overtime
compensation.
Over the past several years, the issue of alternative workweek
schedules has been the subject of discussion in both Senate
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Senate Committee on Labor and Industrial Relations
and Assembly Committees. Similar versions of this bill have
been introduced every year since 2005. In the fall of 2011,
this Committee held an information hearing entitled,
"Workplace Flexibility and the 21st Century Economy: A Review
of California's Workplace Flexibility Laws and Regulations,"
at which both employers and employee representatives had the
opportunity to discuss their views on current law and any need
for improvement. In most cases, the need for flexibility in
the scheduling of workweeks has come from employers making the
argument on behalf of their businesses and their employees,
but much less frequently do we hear from employees themselves
articulating their reasoning for wanting more flexible working
hours.
Some employers see an advantage to be gained in reduced
overhead costs (through energy savings, etc.) by adopting an
alternative workweek, and some may wish to accommodate their
employees' wishes to reduce their commuting hours. For this
purpose, this bill would provide for a process under which
individual employees may make a request for an alternative
workweek schedule, giving up overtime for work in excess of 8
hours. The proportion of workers interested in such
individual accommodations is unknown.
2. Proponent Arguments :
According to the author, existing law is entirely too
difficult to be a viable option for establishing work schedule
flexibility, and argues, that one need only consider the fact
that only a relatively small number of employers have
implemented a flexible work schedule. The author argues that
it is time to think outside of the box. This bill would permit
employees, with the consent of their employer; to adopt an
alternative workweek schedule providing for up to 10 hour
workdays within a 40-hour workweek.
Proponents argue that flexible work schedules are beneficial
to employees, employers, and the environment. For employees,
this flexibility can help to better balance work and personal
lives. For employers, it can greatly increase workplace
productivity, efficiency, and employee recruitment and
retention. And for the environment, flexible schedules mean
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Senate Committee on Labor and Industrial Relations
fewer cars on the road and reduced greenhouse gas emissions.
Lastly, they argue, this bill provides for important employee
protections in allowing for employees and employers to develop
a mutually agreeable alternative workweek schedule.
Additionally, proponents note that California is one of only
three states that require employers to pay daily overtime
after eight hours of work and weekly overtime after 40 hours
of work. They argue that even the other two states that impose
daily overtime requirements allow the employer and employee to
essentially waive the daily eight-hour overtime requirement
through a written agreement. Unfortunately, they argue,
California offers no such common sense alternative. Rather,
they state that California requires employers to navigate
through a multi-step process to have employees elect an
alternative workweek schedule that once adopted must be
"regularly" scheduled. They argue that this process is filled
with potential traps for costly litigation, as one misstep may
render the entire alternative workweek schedule invalid and
leave the employer on the hook for claims of unpaid overtime
wages.
3. Opponent Arguments :
Opponents argue that this bill would undermine the 8-hour day
and allow workers to be pressured to waive daily overtime.
They argue that existing law already permits the adoption of
alternate schedules through either an election or a collective
bargaining agreement. It also permits workers to request "make
up time" as needed to leave early one day to attend to
personal or family errands and stay late the next without the
employer incurring overtime liability. Opponents argue that
California's strong labor laws protect employees from being
forced to accept unsafe and unfair working conditions and this
bill is in direct conflict with decades of worker protection
efforts.
Opponents contend that the current process is not a
complicated or burdensome one; in fact, they argue that its
provisions are the result of Labor-Management discussions at
the Industrial Welfare Commission to establish terms that both
sides thought were fair and workable. Additionally, opponents
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Senate Committee on Labor and Industrial Relations
argue that the current process is largely in the hands of the
employer since 1) the employer has the sole discretion over
whether or not to conduct an election, 2) which worksite or
department are eligible, 3) which schedule options to make
available. Further, opponents point out that even a unit of
just one employee may be offered this alternate schedule
election.
Additionally, opponents argue that it is the employer who has
the most to gain, a significant financial incentive, in moving
an employee from daily overtime to weekly overtime. Permitting
for individual deals, without the protections of an election
or a union, open the door to all manners of employer pressure,
intimidation, and retaliation. The discretion granted to
employers in approving employee requests also allows for
inconsistent company policies and creates the potential for
favoritism.
4. Prior Legislation :
SB 1114 (Dutton) of 2012: Failed Passage in this Committee
This bill would have, until 1/1/15, established a 10 hour
workday in a 40 hour workweek instead of the current 8 hour
workday. Current overtime compensation requirements would
have applied for work in excess of the 40 hour workweek or a
10 hour workday.
SB 1115 (Dutton) of 2012: Failed Passage in this Committee
This bill (SB 607) is almost identical to last year's SB 1115
which failed in this Committee. Last year, SB 1115 would have
applied to small businesses of 10 or fewer employees.
SB 367 (Dutton) of 2011: Failed passage in Senate Labor & IR
Committee
Very similar to this bill, but SB 367 would have made the
provisions of the bill applicable to small businesses
employing 25 or fewer employees.
AB 830 (Olsen) of 2011 and SB 1335 (Cox/Dutton) of 2010 were
identical and both failed passage in their first policy
committee hearing. SBX8 66 (Cox) of 2010 was identical to SB
1335 (Cox and Dutton) of 2010. SB 187 (Benoit) of 2009, AB
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Senate Committee on Labor and Industrial Relations
2127 (Benoit) of 2008, AB 510 (Benoit) of 2007, AB 2217
(Villines) of 2006, SB 1254 (Ackerman) of 2006, and AB 640
(Tran) of 2005 were essentially identical or very similar to
this bill. All of these bills failed passage in their first
policy committee.
SUPPORT
Air Conditioning Trade Association
Associated General Contractors
Associated Builders and Contractors of California
Auto Medics
Automotive Service Councils of California
California Association for Health Services at Home
California Association of Winegrape Growers
California Business Properties Association
California Chamber of Commerce
California Dental Association
California Farm Bureau Federation
California Grocers Association
California Hospital Association
California Hotel & Lodging Association
California League of Food Processors
California Lodging Industry Association
California Manufacturers and Technology Association
California Newspaper Publishers Association
California Restaurant Association
California Retailers Association
California Society for Human Resource Management
California Society of Association Executives
Fisk Automotive
Frank's Automotive
Gene's Auto Repair
German Auto Repair Inc.
Larry's Auto Works
Orinda Motors Inc.
Plumbing-Heating-Cooling Contractors Association of California
Summit Transmission Corp.
Western Electrical Contractors Association
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Consultant: Alma Perez Page 8
Senate Committee on Labor and Industrial Relations
OPPOSITION
California Federation of Teachers
California Labor Federation, AFL-CIO
California Nurses Association
California Rural Legal Assistance Foundation
California School Employees Association
California State Association of Electrical Workers
California State Pipe Trades Council
Consumer Attorneys of California
Service Employees International Union-California
Western States Council of Sheet Metal Workers
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Consultant: Alma Perez Page 9
Senate Committee on Labor and Industrial Relations